How Funds Are Selected

Fund Supermarket Brochure

1. All Funds

In conjunction with Cofunds, we bring you our fund selections from over 2,100 investment funds from over 95 fund management groups.


This means you can choose to spread use your annual ISA allowance and any additional investments across different funds and different providers in the same tax year, giving you more choice and enabling you to spread the risk of your investments.


2. Select Fund Range

To help make choosing a fund easier we have developed our Select Fund range using the independent research of Morningstar OBSR. You can view our current 2015 growth fund selection and our 2015 income fund selection to help you choose. 

About Morningstar OBSR


Morningstar OBSR is a research and consultancy company that specialises in providing qualitative investment research and product analysis. OBSR has grown steadily since it was established in 1999  and was acquired by Morningstar in April 2010. They boast one of the largest and most experienced fund research teams in the UK.

Morningstar OBSR’s research approach


Morningstar OBSR uses an investment research approach that has been in place since 1994 and is founded upon forward-looking, rather than backward-looking research. This leads to a strong emphasis on qualitative aspects of research. The key factors underpinning this research include:

  • Strength of investment process and length of time it has been in place
  • Continuity of investment personnel
  • Investment style that has proven durable over time
  • Clearly defined investment objectives
  • Strong and consistent past performance record


Favourable risk adjusted returns


As part of this research process Morningstar OBSR believe it is critical to obtain a full understanding of the fund and its objectives and so their research is supported by a continuous timetable of fund manager meetings. They also conduct meetings with other members of investment teams and keep in close contact with business managers in order to understand a company’s strategic direction.


The Morningstar OBSR Analyst Ratings

The Morningstar OBSR Ratings Service was set up in 2002 and is now well established as the UK's most highly regarded provider of fund ratings. The ratings signal the level of conviction Morningstar OBSR has in a fund and its ability to meet its objectives now and in future, based on a proven research process where qualitative research is supported by quantitative analysis.


Once they have concluded the due diligence process for a particular fund it may be considered for a Morningstar OBSR Analyst Rating. The fund will then be presented to the Morningstar OBSR Fund Ratings Committee for consideration. Ratings are assigned globally on a 5 tier scale running from Gold to Negative. The top 3 ratings Gold, Silver and Bronze, all indicate that Morningstar OBSR analysts think highly of the fund; the differences between them correspond to differences in the level of analyst conviction in a fund's ability to outperform its benchmark and peers over time, within the context of the risks taken. Neutral Ratings are assigned to funds in which the analysts don't have a strong positive or negative conviction, while funds designated with a Negative rating possess at least one flaw that analysts believe is likely to significantly hamper future performance, such as high fees or an unstable management team.

Morningstar do not work to a ‘quota’ and are not paid to rate funds. The Ratings are designed to be an independent mark of quality but also a clear indication of a manager's ability to meet or exceed a fund's objectives compared to other funds of a similar type. Morningstar OBSR are not paid to rate funds. Morningstar OBSR has a review programme for every fund to assess whether the investment process is still in line with their understanding and is appropriate for its objectives. If material changes occur the Morningstar OBSR Rating may be adjusted, or place Under Review.


Establishing the Select Range of Funds

There are four guiding principles that provide the broad framework for selection:

1. Independence – Morningstar OBSR’s aim is and always has been to provide objective and high quality analysis with ratings awarded on merit. They are not paid to award ratings enabling complete independence and impartiality in their recommendations and to be focused upon investment quality.

2. Investment quality is the most important criteria for the Select Range of funds. This key objective is aligned with Morningstar OBSR’s own research process, which seeks to identify the most compelling investment funds in the each sector/category. The vast majority of the funds on the list enjoy Morningstar OBSR Analyst Ratings.

3. Diversity and coverage are also key requirement for the Select Rage in compiling the fund list we have ensured representation from all major IMA sectors and considered the need to feature funds that have a range of risk profiles and styles.

4. Service and support is also a consideration. Ongoing support and service from fund management companies is extremely important to Fair Investment Company in order to make sure we can offer a first-class service to our investors.

Based on these criteria, the Select Range is a high quality, investment-led and wide ranging fund list that offers fund selections for the majority of investment needs.


Monitoring the Select Range

Morningstar OBSR is responsible for monitoring the funds on in the Select Range. They meet with fund managers on a quarterly basis (six months in the case of multi-managers), ensuring that their opinions are constantly refreshed. Internally, their views are discussed on a weekly basis at regular Morningstar OBSR team meetings and more formally at Ratings Meetings, which occur monthly around a quarterly reporting cycle for each sector.


Criteria for Selection and De-Selection

The aim of the Select Range is to identify funds that satisfy the above criteria and will endure the test o time. Inevitably, with a focus on investment quality, the list will need to change. Potential triggers for a change are:

  • A change in the fund’s management and/or the broader team
  • A change in the fund’s mandate, philosophy, process, risk controls
  • Corporate change
  • A change in the fund’s competitive positioning
  • Morningstar also maintains a list of reserve funds that would be the first port of call in the event that an immediate alternative is required. 

Popular Funds

3. Popular Funds

As well as our Select Fund range we also highlight on the website popular investment funds. Our fund platform service is in conjunction with Cofunds who are the largest independent fund platform in the UK and as part of their service they provide information to us on what funds most people are buying. These funds may not be Morningstar OBSR rated.


New Fund Launch

4. New Fund Launches

From time to time Fund managers launch new funds. These funds will have no Morningstar OBSR rating or previous track record but may be of interest to investors. See our new fund launch section for latest details.


Helpdesk - Fair Investment Company 

 Important Risk Information:

This website contains information only and does not constitute advice or a personal recommendation in any way whatsoever. The value of investments and income from them can fall as well as rise and you may not get back the full amount invested. The tax efficiency of ISAs is based on current tax law and there is no guarantee that tax rules will stay the same in the future.

Different types of investment carry different levels of risk and may not be suitable for all investors. Please ensure that you read the Important Risk Information for further details. Prior to making any decision to invest, you should ensure that you are familiar with the risks associated with a particular investment and should read the product literature. If you are in any doubt as to the suitability of a particular investment, both in respect of its objectives and its risk profile, you should seek independent financial advice.